A day before the start of the United Nations climate talks in Paris, Bill Gates is announced the Breakthrough Energy Coalition, a group of more than 20 billionaires who have agreed to invest in innovative clean energy.
Gates and world leaders will also be announcing an initiative called Mission Innovation, which Gates describes as “a commitment by more than ten countries to invest more in research on clean energy.” The 20 countries include the U.S., Brazil, China, Japan, Germany, France, Saudi Arabia, South Korea and many others. Each country pledges to double government investment in clean energy innovation and to be transparent about its clean energy research and development efforts.
The world needs widely available energy that is reliable, affordable and does not produce carbon. The only way to accomplish that goal is by developing new tools to power the world. That innovation will result from a dramatically scaled up public research pipeline linked to truly patient, flexible investments committed to developing the technologies that will create a new energy mix. The Breakthrough Energy Coalition is working together with a growing group of visionary countries who are significantly increasing their public research pipeline through the Mission Innovation initiative to make that future a reality.
The new model will be a public-private partnership between governments, research institutions, and investors. Scientists, engineers, and entrepreneurs can invent and scale the innovative technologies that will limit the impact of climate change while providing affordable and reliable energy to everyone. The existing system of basic research, clean energy investment, regulatory frameworks, and subsidies fails to sufficiently mobilize investment in truly transformative energy solutions for the future.
The foundation of this program must be large funding commitments for basic and applied research, and here governments play the key role. Only our governments have the mandate to protect the public interest as well as the resources and mechanisms to do this. We know government investment in research can lead to the creation of industries that advance the common good and are driven by private capital. However, current governmental funding levels for clean energy are simply insufficient to meet the challenges before us.
Government research is not enough. We must also add the skills and resources of leading investors with experience in driving innovation from the lab to the marketplace. The private sector knows how to build companies, evaluate the potential for success, and take the risks that lead to taking innovative ideas and bringing them to the world.
But in the current business environment, the risk-reward balance for early-stage investing in potentially transformative energy systems is unlikely to meet the market tests of traditional angel or VC investors – not until the underlying economics of the energy sector shift further towards clean energy. Experience indicates that even the most promising ideas face daunting commercialization challenges and a nearly impassable Valley of Death between promising concept and viable product, which neither government funding nor conventional private investment can bridge.
We are committed to doing our part and filling this capital need by coming together in a new coalition. We will form a network of private capital committed to building a structure that will allow informed decisions to help accelerate the change to the advanced energy future our planet needs. Success requires a partnership of increased government research, with a transparent and workable structure to objectively evaluate those projects, and committed private-sector investors willing to support the innovative ideas that come out of the public research pipeline.
Together we will focus on early stage companies that have the potential of an energy future that produces near zero carbon emissions and provides everyone with affordable, reliable energy.